支付0604.ppt

Letter of Credit belongs to bank credit. As long as the beneficiary presents the stipulated documents in conformity with the L/C, the issuing bank of the L/C must make the payment firstly. Features of the L/C Letter of Credit belongs to bank credit. As long as the beneficiary presents the stipulated documents in conformity with the L/C, the issuing bank of the L/C must make the payment firstly. Features of the L/C Banks deal with documents. In letter of credit business, banks deal with documents, not goods or services or performance to which the documents may relate. That means the bank is not responsible for the goods, but only for the documents. If the documents presented are not in conformity with the L/C, the bank will refuse to pay no matter whether the goods shipped agree with those stipulated in the contract. Banks deal with documents. In letter of credit business, banks deal with documents, not goods or services or performance to which the documents may relate. That means the bank is not responsible for the goods, but only for the documents. If the documents presented are not in conformity with the L/C, the bank will refuse to pay no matter whether the goods shipped agree with those stipulated in the contract. A letter of credit is a self-sufficient document. Letter of credit is opened on the basis of the contract, and independent from the contract once it is opened. The bank is only bound by, responsible for the Credit, and makes payment against documents which are fully in conformity with the Credit. ● Clean L/C A clean L/C is a credit under which the payment will be made only against a clean draft without any shipping documents attached or sometimes, against a draft with an invoice alone. It can be used in the case of prepayment in international trade. ● Documentary L/C (1) According to the attaching of documents Kinds of letter of credit A documentary L/C is a credit that should be negotiated by a documentary